To think there's a worrying number of people who are under the impression that Local Authority housing is free?

[MrsWinnibago]

I've read things on MN a few times which make me realise that some people seem to be under the impression that if you live in a council house or a housing association house then you don't pay for it.

They seem to think that people in these properties get full housing benefit as some kind of default!

Am I wrong? Please tell me I'm wrong. It's a minority of people who think this yes?

So WHY don't they call it a subsidy then written?

it's subsidised, not a direct subsidy. that's probably why.

Although, apparently, seething (frothing? I don't remember) call it a subsidy.

With regard to taxpayers getting value for money, the revenue generated by social housing is around 4 times the amount the taxpayer contributes to it.

that's called profit. not fair value.

Oh dear. She really doesn't get it.

And written as a non-profit organization HAs must put it back into building more homes and repair programms (eg: refit kitchens every 20 years. Councils on the hand used to use their 'profits' from renting homes to subsidise other services, etc. Now the latter is a direct subsidy from council house tenants to non-tenants.

Written is quite correct and I can't see why others do not understand this.

A. If social housing was free (and it is not) you would agree it was a subsidy - yes?

B. Would a cost of £1 month be a subsidy?

If you agree with A&B, then you must logically agree that any less then 'market rent' is a subsidy.

There are many arguments about what 'market rent' should be, and none of this is an argument against social housing policy, but the correct word is subsidised if below equivalent private rents.

@carol well well...

If the government were to sell a piece of land to BP for 100 pounds, and shell oil was willing to pay 1 billion for it, would that be a subsidy to BP? No! not according to people here! That's 100 pounds of pure profit!

No written that's corruption.

float so selling something to 'big evel business' at a discount is corruption, but doing so to voters is not even a subsidy, but perfectly correct.

Isn't HA rent governed by the Fair Rent Act, which defines a reasonable price for properties, whereas now there is no such law governing private rentals? It's more correct to say that rents in the private sector are massively inflated (or that HA tenants pay the correct rent and many private tenants are shafted).

If you'd define the generally cheaper cost of HA properties to be a subsidy because it is cheaper, you can buy eg 6 bags of crisps in Asda for 1.89, the same 6 bags in Home Bargains for 99p and in B & M for 59p. Where's the subsidy? Just because something's cheaper doesn't mean it's subsidised.

Mind you, I'd build enough LA and HA houses and flats for everyone who wanted if it was up to me.

I think the term I'm looking for is RRP. Fair Rent can be thought of as the RRP/market value of a house so if that's defined as 100 then if you pay 200 for it, you're being diddled, so to speak.

(I'm a little hard of thinking because of a head cold so hopefully the above makes sense!)

carol If government sell something to private enterprise for substantially less than it's worth there is either corruption or huge stupidity but anyway it's illegal and a misuse of taxpayer assets - particularly if another private enterprise is willing to pay more. Now if what you are saying is that all 'social housing' should be the same rent as all private housing, then surely we should all be earning the same too - irrespective of what job we did. I think that's called Communism isn't it...

If government sell something to private enterprise for substantially less than it's worth there is either corruption or huge stupidity but anyway it's illegal and a misuse of taxpayer assets

now we are making some progress. However, we accept this for social housing (and we tacitly accept it for big business as well, something that I am against), because we see it as a public good. I am fine with that. But let's be clear about what's going on. Let's not sugar coat it.

Now if what you are saying is that all 'social housing' should be the same rent as all private housing, then surely we should all be earning the same too - irrespective of what job we did. I think that's called Communism isn't it...

how that follows is beyond me.

Just because something's cheaper doesn't mean it's subsidised. again, nobody is saying it is subsidised because it is cheaper. it is subsidised because the government could get a better price (higher rent).

You could get a higher price for many things. Doesn't mean that selling them cheaper (or at RRP) means they're subsidised.

You could get a higher price for many things. Doesn't mean that selling them cheaper (or at RRP) means they're subsidised.

it kinda does. the reason why is that those are public assets, but a small number of people are disproportionately benefiting from them (which, as I said, isn't necessarily wrong). we subsidise all sorts of things here (schools, universities, museums etc). does it sounds more like a subsidy if the people get charged full rent and get given 20% back? that ends up being the same.

It doesn't mean they're subsidised at all. Is the customer at B & M being subsidised when they buy their cheaper crisps? Or, more to the point, is a customer who buys something at the RRP (or fair rent) being subsidised when they could go somewhere else and pay double?

Clearly there are different interpretations of the word "subsidy" with regard to social housing. The point is that the word has been used negatively in this instance and yet does not appear in the media with regard to my earlier example, capital gains tax.

To return to the OP, the idea of "subsidised" housing is the route I think to the misconception of "free" housing.

You could get a higher price for many things. Doesn't mean that selling them cheaper (or at RRP) means they're subsidised.

Not really comparable things in the private sector - ASDA can charge more for crisps because they provide other, intangible, benefits, such as easy access to your whole shop, thus saving time which is valuable to some people.

The real test to see if something is too cheap is demand. There is a higher demand for social housing than private rental. This means it is too cheap for the market and thus subsidised.

Fair Rent can be thought of as the RRP/market value of a house so if that's defined as 100 then if you pay 200 for it, you're being diddled, so to speak. RRP was set by manufacturers (now illegal to enforce) to prevent retailers competing and 'devaluing' the product. 'Fiar value' is simply the price a willing buyer and willing seller agree, so depends on alternatives, such as the private rental market.

Social housing is sold at undervalue either because the government believe it is a good thing or to bribe voters, or both.

Reading through the points raised I'm trying to work out where the low paid should live if they should be competing in the 'all rents the same' market? Even if it were possible that all people had the intellect, capacity and physical ability to be in the position to aspire and attain a well-paid job then who would clean the public toilets, wash the dishes in restaurants, schools and office canteens, etc, etc. If they are paid a lower wage surely they should have somewhere half decent to live in too. Where should they live? Isn't that why it's called 'social housing' because society as a whole benefits from it?

I never said there shouldn't be social housing. I said don't claim it isn't subsidised.

but where should they live? like most of us, maybe not zone 1 in London, the most expensive part of the country. but the government, while trying to help the problem through subsidies, could better help by either building housing or loosening up planning so that private builders can build. too much demand for too little supply. you could try and curb foreign demand, and maybe even make BTL less attractive by making tenants rights ALL ROUND (not just social housing tenants) much stronger. but like most things, housing will cost less if there was more of it.

The truth is BTL is too good an investment. see here

The real test to see if something is too cheap is demand. There is a higher demand for social housing than private rental. This means it is too cheap for the market and thus subsidised.

Eh? Of course there's a higher demand for social housing because it's cheaper, but you could equally argue, with more justification, that private rents are too high for the market and thus are extortionate. Saying that a subsidy applies seems based on your personal viewpoint, rather than on unbiased evidence leading to a logical conclusion.

I would pay more for a secure, life-long tenancy. I would definitely pay more. For many it's not only the cheapness that's attractive but the SECURITY. The horror of living in private rental with a family when at any moment you can be told to leave within 2 months is dreadful.

Moving privately costs a lot...more than your original deposit because of agent's fees.

Not everyone is in a position to buy...and that's fine. I just want somewhere safe...that I won't be told is on the market.

Eh? Of course there's a higher demand for social housing because it's cheaper, but you could equally argue, with more justification, that private rents are too high for the market and thus are extortionate.

you aren't getting her point. the test that social housing has artificially low rents (or are constrained in some way) IS that demand is higher. That's your red flag.

I would pay more for a secure, life-long tenancy.

tenancy protections are very weak here. I would be the first to say that everyone (not just council tenants) should have far better protections. That will also have the side benefit of taking pressure off the selling market.

I know that landlords need protection too....I think private landlords should be rewarded for offering long term tenancies to people. The way it should be done is this...landlords who do not offer long term tenancies should pay the council tax on the properties they're renting out...but those offering long term tenancies do not have to...their tenants would pay.